Opening an RESP
RESP Provider
Any RESP provider will help you open your savings plan.
Choose an RESP provider wisely; he or she has an important role to play throughout the life of your RESP, which can remain open for a maximum of 26 years:
- Ask for help choosing from three general types of plans: family plans, individual plans or group plans.
- Once you’ve chosen your plan, ask for advice about making wise investments.
- When your beneficiary starts using the RESP, your RESP provider will administer the payments and ensure that they are made according to the terms of your plan.
- Your RESP provider can also ensure that your contributions are returned should the beneficiary choose not to pursue a post-secondary education.
- Some RESP providers charge service fees. Some may also limit the amount of money you can put into your plan and tell you how often you can contribute. Before you open an RESP, ask the RESP provider to explain any fees, limits, penalties or requirements to make regular payments that may apply.
Opening an RESP
- Make sure you and all beneficiaries have a birth certificate and a Social Insurance Number (SIN).
- Choose an RESP provider that best meets your needs.
- Discuss with your provider about the type of RESP you want to open.
- Start putting money into your RESP.
Growing Your Money
Ask your RESP provider about your investment choices. Some providers offer a variety of investment choices while others have a set investment plan. Remember to take your time before you decide. Ask questions, and learn about the advantages and the risks of every decision.
Types of RESPs
There are three general types of RESPs: family, individual or group RESPs
A family plan, in which you register a plan on behalf of a child that is related to you. It may be right for you if:
- You want one (or more) child to be able to use the money
- You want to decide how to invest the money, either on your own or with the help of a financial advisor
- You don’t necessarily want to make regular monthly payments
An individual plan is good for a child that is either related to you or not. It may be a good choice if:
- You want to save for a child who is not related to you
- You want to decide how to invest the money, either on your own or with the help of a financial advisor
- You don’t necessarily want to make regular monthly payments
A group plan is for one child that is either related to you or not. It may work best if:
- You can make regular payments into the RESP
- You prefer to have someone else decide how to invest the money for you
- You are fairly sure that the beneficiary you are saving for will continue their education after high school
In a group plan, you must generally agree to make regular payments into the plan over a certain period of time. The plan is offered and administered by a group plan dealer, and each plan has its own rules. Usually, the money must be invested in low-risk securities such as bonds, treasury bills and guaranteed income certificates (GICs).
In a group plan, savings are “pooled” with those of other beneficiaries of the same age. The amount of money each child gets is based on how much money is in the pool, and on the total number of students in the pool who are in school that year. This means that your child might actually receive more money than you had initially contributed. Check with your RESP provider for more details.
You can name only one child in a group plan and the child does not have to be related to you. Since each group plan is different, it is important to ask your group plan dealer for details.